Camping World shareholders sue Lemonis over ‘massive insider selling scheme’
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Camping World shareholders are suing its owner, Marcus Lemonis, and the private equity firm leading Gander Mountain’s return to business for running what has been described as a ‘massive insider selling scheme’.
Fishing Tackle Retailer, the US business magazine for the recreational fishing tackle industry, reports that a suit was filed in the US District Court of Northern Illinois last week and alleges that Camping World investors were misled during the rebranded Gander Outdoors roll-out. The defendants are said to have sold over $530m worth of the group’s Class A shares at artificially inflated prices.
Camping World acquired Gander Mountain from bankruptcy in May 2017 for approximately $37m and announced a plan to reopen 70 of the big box stores under a new name, Gander Outdoors. By June that had been scaled back to just 57 outlets.
The suit says: “In May 2017 Camping World announced that it would be expanding its operations to include retail stores for outdoor sporting supplies and accessories by acquiring the assets of Gander Mountain from bankruptcy… this securities fraud class action arises from materially false and misleading statements made by the defendants during the Class Period regarding Camping World’s financial performance, including its historical financial results and its integration and operation of the newly acquired Gander stores.”
It also alleges that the integration of the Gander stores suffered severe setbacks that negatively impacted margins rather than bolstering them.
During a quarterly conference call, Lemonis dubbed the Gander roll-out a ‘giant sh*t show’. Plaintiffs say that ‘show’ sent Camping World stock plunging from $47 per share to below $20, ‘costing investors hundreds of millions of dollars’.
In addition to Lemonis and Crestview Partners, the suit lists Camping World CFO Thomas Wolfe, COO Brent Moody and Director Stephen Adams as defendants.
Shareholders are requesting a trial by jury and certification of the case as a class action.